May 18, 1993
Xxxxxx X. Xxxxx
0000 Xxxxxxxx Xxxxxxxxx, Xxx. #0
Xx Xxxxxxxxx, Xxxxxxxxxx 00000
RE: EMPLOYMENT AGREEMENT
--------------------
Dear Xx. Xxxxx:
SERENA International ("SERENA") is pleased that you are accepting the position
of Senior Software Engineer ("Position") for development and maintenance of
PDSTOOLS and other software products, subject to the terms and conditions set
forth in this Letter Agreement ("Agreement"). In consideration of the mutual
agreements set forth below, you and SERENA agree to the following terms and
conditions:
1. NATURE OF BUSINESS
SERENA licenses PDSTOOLS (also referred to as SysProg Utilities and/or
PDS/E) and SyncTrac-Registered Trademark- directly through its sales
force to end users, and SERENA licenses Change Man-Registered Trademark-
and COMPAREX-Registered Trademark- through distributors to end users. As
of January 1, 1993, SERENA has begun direct licensing of Change
Man-Registered Trademark- in Canada. Due to the nature of SERENA's
business and the volatility of the marketplace, the size and business
practices of SERENA may rapidly change. You agree that SERENA may, at
its discretion, make such changes in the duties and responsibilities of
your Position as it deems appropriate.
2. EMPLOYMENT
Accepting the terms of this Agreement is a condition of employment for the
Position. In accepting the terms of this Agreement, you hereby acknowledge
that your permanent, full-time employment is "at-will." You further
understand that either you or SERENA can terminate this employment
relationship at any time, without prior notice, for any reason. Neither you
nor SERENA has to give "cause" for termination. You also recognize that
SERENA reserves the right, in its sole discretion, to make personnel
changes for its own purposes, without limitation, and without incurring any
liability.
Your start date shall be Thursday, July 1, 1993. If there is any change in
your start date, please inform SERENA.
3. DUTIES OF AGREEMENT
Your specific duties and assignments are defined for you in Exhibit A.
You shall be reporting to A. Xxxxx Xxxxxx.
You shall serve in this Position with such duties and responsibilities that
exist as of the date this Agreement is signed and/or as may later be
assigned by SERENA. You agree to devote all of your business time, skill,
attention, and best efforts to SERENA's business to discharge and fulfill
the responsibilities assigned to you by SERENA during your employment under
this Agreement. You agree that you will not render services to any other
person or entity of any kind for compensation without the prior written
consent of SERENA. In addition, you shall not engage in any activity which
conflicts or interferes with the performance of the duties and
responsibilities of this Position.
4. COMPENSATION AND BENEFITS
a. Commissions on PDSTOOLS Revenues. - During your employment under this
Agreement, you are entitled to receive Commissions on PDSTOOLS
Revenues as follows:
(1) 7.7% of the Gross Domestic Revenues of PDSTOOLS;
(2) 9.4% of the Net International Revenues of PDSTOOLS.
Gross Domestic Revenues are defined as cash receipts to SERENA from
new licenses, leases, rentals, and maintenance and enhancement (M&E)
revenues received from licensees of PDSTOOLS in the United States.
Net International Revenues are defined as monies received by SERENA
International Headquarters from SERENA offices and distributors
outside the United States for new licenses, leases, rentals, and M&E
revenues for PDSTOOLS.
The Commissions (net of Advances described below) are paid on a
quarterly basis on the 15th day of the month following the calendar
quarters. The Commissions are based on Gross Domestic Revenues and Net
International Revenues received during the preceding quarter.
You are entitled to receive a monthly nonrefundable Advance on these
Commissions in the amount of $6,000 per month. These Advances will be
reconciled against the actual Commissions at the end of each calendar
quarter. Any Advance balance will be carried forward to the following
periods as an offset to future Commissions.
b. Commissions on New Products. - During your employment under this
Agreement, you are entitled to receive Commissions of 7% on Net
Revenues from New Products that are developed substantially by you.
Net Revenues is defined as cash receipts to SERENA from new licenses,
leases, rentals and M&E revenues received from licenses of New
Products.
To qualify for the Commissions, you must prepare and produce 80% or
more of the program code, tests and documentation for the New
Products, as well as continue to provide 80% or more of the
maintenance and enhancements for the New Products.
c. SERENA may make such deductions, withholdings, or payments from lump
sums payable to you pursuant to this Agreement which are required by
law for taxes and similar charges. In the event of your death, SERENA
will make all Commission payments which are accrued and not yet paid
as of the date of your death to your legal representative.
d. SERENA will pay you a $2,000 moving allowance in July to move your
possessions from Southern California to Northern California.
e. Benefit Plans.- You are entitled to participate in or receive benefits
under SERENA's employee benefit plans and policies as in effect from
time to time ("Benefit Plans"), subject to the generally applicable
terms and conditions of the particular Benefit Plan. These Benefit
Plans may include health care, life insurance, accidental death and
disability, long-term disability, and/or savings plans provided by or
through SERENA or made available by SERENA. The provisions of the
Benefit Plans are incorporated into this Agreement by reference. Your
insurance coverages will begin on the first day of the month in which
your current insurance coverage with Bank of America terminates.
f. Receipt of Documentation. - You acknowledge that you have received
from SERENA a copy of the Summary of Benefits, as well as SERENA's
Employee Benefit Summary, both documents attached as Exhibit B,
relating to health care, life insurance, accidental death and
disability, and savings plans. You understand that SERENA reserves the
right and option, in its sole discretion, to change, interpret or
modify these policies at any time.
g. Nothing in the preceding paragraphs relating to benefits under this
Agreement shall affect the "at-will" character of this Agreement.
5. TRADE SECRETS, PROPRIETARY AND CONFIDENTIAL INFORMATION
As an expressed condition of your employment with SERENA, you agree to
execute confidentiality agreements as requested by SERENA, including, but
not limited to, SERENA's Employee Proprietary Agreement as it is from time
to time amended.
You further agree that any trade secrets, proprietary and confidential
information acquired by you during the course of your employment is both
confidential and essential to SERENA's business. You agree that you will
not utilize or reveal such information to others, either during the life of
this Agreement or at any time thereafter, except where such use and
disclosure is necessary for the performance of your duties and
responsibilities in the Position or authorized in writing by SERENA.
You further recognize that SERENA's work force constitutes an important and
vital aspect to its business. You agree, therefore, that for a period of
one year following the termination of this Agreement for any reason
whatsoever, you shall not solicit any of SERENA's then current employees to
terminate their employment with SERENA and to become employed by any firm,
company, or other business enterprise with which you may then be connected.
6. COMPENSATION AND BENEFITS UPON TERMINATION OR DEATH
Upon termination of your employment, SERENA will pay you certain
compensation and benefits. The benefits referred to herein do not change
the "at will" nature of this Agreement. The benefits and compensation that
SERENA will pay you include the following:
a. All Commissions, vacation pay, and appropriate bonus, if any, accrued
through the date of your termination from SERENA and not yet paid.
b. You will not be entitled to receive any other compensation or benefits
provided by or on behalf of SERENA, other than vested benefits that
are payable in accordance with the terms of any applicable benefit
plan, and amounts provided in 6(d) herein.
c. Continuation of any life insurance, accidental death and disability or
any other benefits if you make an appropriate conversion and comply
with the requirements of each plan. Your rights to continue group
health plan coverage will be determined in accordance with applicable
federal law.
d. The Commissions to your estate in case of death or disability will be
as follows:
i In the first year following your death, Commissions will be the
standard rate in paragraph 4(a)(b) above.
ii In the second year following your death, Commissions will be
reduced to 66-2/3% of the standard rate in paragraph 4(a)(b)
above.
iii In the third year following your death, Commissions will be
reduced to 33-1/3% of the standard rate in paragraph 4(a)(b)
above.
iv There will be no Commissions after the third year following your
death.
7. SUCCESSORS
SERENA will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of SERENA to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that SERENA would
be required to perform it if no such succession has taken place. Failure of
SERENA to obtain such an assumption and agreement prior to the
effectiveness of any such succession shall entitle you to the benefits
listed in Paragraph 6a of this Agreement, subject to the terms and
conditions therein.
8. ARBITRATION/GOVERNING LAW
Any dispute, claim or controversy of any kind, arising under, in connection
with, or relating to this Agreement or your employment, except as provided
in Paragraph 5 above, shall be resolved exclusively by binding arbitration
in San Francisco, California in accordance with the commercial rules of the
American Arbitration Association then in effect. You and SERENA agree to
waive any objection to personal jurisdiction or venue in any forum located
in San Francisco, California. Except as provided in Paragraph 5 above, no
claim, lawsuit or action of any kind may be filed by either party of this
Agreement; arbitration is the exclusive dispute resolution mechanism
between the parties hereto. Judgment may be entered on the arbitrator's
award in any court having jurisdiction. The validity, interpretation,
effect and enforcement of this Agreement shall be governed by the laws of
the State of California.
9. ENTIRE AGREEMENT
This Agreement sets forth the entire Agreement and understanding between
you and SERENA, and supersedes any other negotiations, agreements,
understandings, oral agreements, representations or past or future
practices whether written or oral, by SERENA.
Each SERENA plan or policy referred to herein directly or by implication is
incorporated herein only insofar as it does not contradict this Agreement.
If any inconsistencies between this Agreement and any such plan or policy
exist, this Agreement shall control. Nothing in any such plan or policy
shall change the "at-will" nature of this Agreement, by which either party
can terminate this Agreement without regard to cause.
10. RIGHT TO ADVICE OF COUNSEL
You have the right to consult with your lawyer so that you are fully aware
of your rights and obligations under this Agreement.
11. MODIFICATION
This Agreement may not be amended, modified, or changed or discharged in
any respect except as agreed in writing and signed by you and a designated
officer of SERENA.
12. SEVERABILITY AND INTERPRETATION
In the event that any provision or any previous portion of this Agreement
is held invalid or unenforceable by a court of competent jurisdiction, such
provision or portion thereof shall be considered separate and apart from
the remainder of this Agreement, and the other provisions shall remain
fully valid and enforceable. In the event that any provision shall be held
to be overly broad as written, such provision shall be deemed
amended to narrow its application to the extent necessary to make the
provision enforceable according to applicable law and enforced as amended.
13. NOTICES
All notices required by this Agreement shall be given in writing either by
personal delivery or first class mail, return receipt requested. Notices
given by SERENA shall be addressed to SERENA's address set forth on the
first page of this Agreement. Notice given by mail shall be deemed given
five (5) days following the date of mailing.
14. MISCELLANEOUS
The rights and obligations of SERENA under this Agreement shall inure to
the benefit of and shall be binding under the present and future
subsidiaries of SERENA, any and all successors and assigns of SERENA. No
assignment of this Agreement by SERENA will relieve SERENA of its
obligations hereunder. You shall not assign any or your rights and/or
obligations under this Agreement and any such attempted assignment will be
void. This Agreement shall be binding upon your heirs, executors,
administrators or other legal representatives and their legal assigns.
15. DAMAGE LIMITATION
Upon termination of your employment, you shall not be entitled to recover
any compensation, benefits or damages except as specifically described
herein. This damage waiver provides that no damages (including without
limitation, special, consequential, general, liquidated, or punitive
damages) shall be required by or on behalf of SERENA.
16. WAIVER
A waiver by either party of any of the above terms and conditions of this
Agreement in any instance shall not be deemed or construed to be a waiver
of such term or condition for the future, or of any subsequent breach
thereof. All remedies, rights, undertakings, obligations and agreements
contained in this Agreement shall be cumulative, and none of them shall be
in limitation of any other remedy, right, undertaking, obligation, or
agreement of either party.
If this letter sets forth our entire agreement, please sign below and return the
original to me. You may keep the enclosed copy.
SERENA International
/s/ Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx
Chief Operating Officer
I, Xxxxxx X. Xxxxx, hereby state that I understand and agree with the terms and
conditions on pages 1 through 6 of this letter Agreement. Accepted and agreed to
this 18 day of MAY, 1993.
/s/ Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx
EXHIBIT A
JOB DESCRIPTION
SENIOR SOFTWARE ENGINEER
80% or more of your time will be spent in development, enhancement, maintenance,
support and coordination on PDSTOOLS, a software product owned by A. Xxxxx
Xxxxxx and marketed exclusively by SERENA.
The remaining 20% or less of your time will be spent in development of new
products, in the enhancement, maintenance and support of other SERENA products,
or in the development of PC skills for porting SERENA products to the PC or
other platforms.
You have an idea for a product to build LOGON procedures dynamically. SERENA has
not done a marketing plan for this product and, accordingly cannot adjudge the
potential of this product. It is your responsibility to prepare a clear
description of the product idea to enable SERENA to prepare a marketing plan.
Your specific duties and assignments for PDSTOOLS are as follows:
1. Development, enhancement and maintenance of PDSTOOLS, the primary set of
duties, to keep PDSTOOLS competitive and state-of-the-art with IBM's
operating system and direction and to meet the requirements of the Software
Service Level Objectives and Maintenance & Enhancement (M&E) Plan for all
PDSTOOLS customers.
2. Support for customers and prospects as needed (recognizing that the support
role is secondary to the development, enhancement and maintenance
activities).
3. Participate in monthly meetings to discuss and present the development and
enhancement plan as well as reported and outstanding problems on PDSTOOLS
along with other PDSTOOLS developers and support people.
4. Participate in quarterly meetings to discuss and present the development
and enhancement plan as well as reported and outstanding problems on
PDSTOOLS along with other PDSTOOLS developers and support people.
5. Participate in meetings with users and prospects to determine product usage
and direction.
6. Participate in meetings with marketing, sales and support personnel to
determine product usage and direction.
7. Occasionally assist other developers with technical approaches or ideas to
assist with the development of other products.
EXHIBIT B
SUMMARY OF BENEFITS
MEDICAL, DENTAL AND OTHER INSURANCE
The monthly premium is fully paid by SERENA for the employee and his/her
dependent(s). Medical coverage commences on the first of the month in which the
current insurance coverage with Bank of America terminates. The Company will
reimburse up to $250.00 each calendar year per employee to cover the initial
deductibles.
Life insurance is also included in this plan, and each employee is insured for
$25,000.00.
Long-Term Disability benefits are also part of the plan, as well as a
comprehensive dental program.
VACATION
An employee is entitled to two (2) weeks of vacation per year after the first
year and up to five years of employment; on the sixth year and thereafter, an
employee is entitled to three (3) weeks of vacation per year. (Should an
employee resign or is terminated, vacation will be calculated on a prorated
basis.)
HOLIDAYS
SERENA observes eight (8) holidays: New Year's Day, President's Day, Memorial
Day, Independence Day, Labor Day, Thanksgiving Day and the Friday after, and
Christmas Day.
401K PLAN
An employee is allowed to participate in this payroll deduction benefit provided
that all conditions are met. This is a planned retirement, incentive-type
program where the employee has the discretion of investing funds in various
options (stocks, bonds, etc.)
HEALTH CLUB
Membership fees are paid for by the Company for the employee only.
COSTCO
Membership fees are paid for by the employee.
AMENDMENT TO SOFTWARE LICENSE AGREEMENT
This Amendment to SOFTWARE LICENSE AGREEMENT dated for reference NOVEMBER 19,
1990 is made by and between Xxxxx Xxxxxx ("Licensor") and SERENA, a California
corporation, ("Licensee") with reference to the following facts:
A. By documents dated January 31, 1989, the parties made and executed a
certain Software License Agreement and Addendum thereto (collectively "License
Agreement").
B. Language in the original License Agreement referred to "gross revenues"
with no provision for marketing expenses in calculating "net revenues."
C. A third party (Xxxxxx Xxxxx) has been receiving six (6%) percent of "net
revenues" of which Licensor has contributed four (4%) percent and Licensee has
contributed two (2%) percent. Copy of a letter dated November 27, 1989 signed by
Xxxxxx Xxxxx and Xxxxxxx X. Xxxxxx stipulating these terms is attached.
D. The parties now desire to amend the License Agreement in certain
particulars.
NOW THEREFORE it is agreed as follows:
1. Section 8.1 under Paragraph 8.0 of the License Agreement is replaced by the
following language:
8.1 In consideration of the rights and licenses granted hereunder, and
subject to the provisions of sections 8.2 and 8.3, Licensee agrees to pay
to Licensor a royalty equal to thirty-six percent (36%) of Licensee's NET
revenues from sales, sublicenses, leases, rentals, maintenance and
enhancement fees, or other transfers of the Software. Said royalties shall
be reconciled on a cash basis and paid quarterly. Net revenues shall be
defined here as monies paid to Licensee after marketing expenses.
Domestically, (United States and Canada) that is pegged at seventy percent
(70%) of gross revenues when sold directly by Licensee. In foreign markets
and other cases of indirect marketing efforts where agents are involved,
net revenues are pegged at eighty-five percent (85%) of Licensee royalty.
2. Given that royalty payments have been paid based on net revenues, it is
agreed that these terms are retroactive to the original execution date.
3. Except as provided in this Amendment, the License Agreement remains
unchanged.
Executed in Burlingame, California on November 19, 1990.
Xxxxx Xxxxxx SERENA
/s/ A. Xxxxx Xxxxxx /s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx, President
Nov 19, 1990 Dated November 19, 1990
